We taxpayers get fleeced again

As a past governor of Pennsylvania, Democrat Ed Rendell showed incredibly poor judgment in signing off on $1 million in bonuses given to staff and volunteers who managed the 2016 Democratic National Convention in Philadelphia.

The galling part is that he did not clear the action with the board of directors of the nonprofit organization that put the event together. He also seemed to be oblivious that these bonuses came from the wallets of hardworking Pennsylvanians, as did $10 million of state funds earmarked to manage the convention.

The public funds were on top of private donations to put on the big show that culminated in the nomination of Hillary Clinton for president. The public fund grant was justified because it juiced the economic engine that emerged from having an event of this scope in the City of Brotherly Love.

Although final economic impact figures have not been certified, the Democratic National Committee had estimated that the convention would bring $350 million to the city and surrounding areas, basing that number on what had been reported after the 2000 Democratic National Convention, also held in Philadelphia.

State Auditor General Eugene DePasquale is equally incensed over the bonuses and has asked the Internal Revenue Service to investigate.

When Philadelphia won the coveted site selection contest for the Democrats’ quadrennial convention, the nonprofit DNC Host Committee helped manage the event.

DePasquale said that bonuses given to board members Kevin Washo and Eliza Rose, who were also paid staff members, may have violated IRS regulations that prevent any individual of a nonprofit organization from benefiting from its earnings.

DePasquale agreed that it is confusing to determine whether Washo and Rose were paid bonuses as employees or as board members, which is why he wants the IRS to wade in to untangle the details.

The auditor general was critical of Rendell, who served two terms as governor from 2003-10. He said Rendell, who oversaw the convention’s Bid and Host Committees, should have gotten approval from the Host Committee board before paying out more than $1 million to staffers and interns in November 2016.

“Rendell admitted to me and my team that he should have consulted the Host Committee’s board about such a decision, but he didn’t, and the damage is done,” said DePasquale, a fellow Democrat.

On the good news side of the ledger, DePasquale said that his monthslong review of spending by the Host Committee didn’t find any misuse of the $10 million it received from the state to help fund the convention.

He was, however, critical of the agreement that was drafted and signed authorizing the grant. He scolded state officials who did not insist on a provision that would have allowed funds not needed or spent to be returned to the state rather than dished out as bonuses.

DePasquale said the agreement should have specified that if there were enough private funds raised for the event, any leftover money should have been returned to the state.

In the 26-page grant agreement, there is just one sentence that dictated how the Host Committee was to spend the $10 million state grant: “The Host Committee will use the funds to pay for the infrastructure necessary for the City of Philadelphia to host the Convention, including rental and build out of the Convention arena and other facilities, transportation, communications, technology systems, necessary office space and event security.”

“That’s it,” DePasquale said. “There are 24 pages of boilerplate legal language, then an ‘Oh, by the way, here are some vague ways you can spend taxpayer dollars.’ ”

In his report, DePasquale listed four recommendations on how to handle future grant agreements of this type using taxpayer funding. The bonuses to the 12 staff members ranged from $310,000 for Executive Director Kevin Washo of Scranton to $13,358 for office manager Letty Santarelli of Philadelphia. Interns and some volunteers received $500 each in bonus money. All in all, the bonuses totaled a little more than $1 million.

According to Philadelphia Magazine, Santarelli is said to be the secret girlfriend of Philadelphia Mayor Jim Kenney, who recommended her for the DNC job and who accompanied him on a recent trip to Iceland.

Nice work if you can get it.

By Bruce Frassinelli | tneditor@tnonline.com